Gold Bullion Updates

Brazil Central Bank raises Gold Reserves:

Central banks have been expanding bullion reserves to diversify from currencies. Nations may add almost 500 tons this year, the London-based World Gold Council said in August. Brazil raised its Gold Bullion reserves last month for the first time since December 2008 and countries from South Korea to Russia increased holdings this year, International Monetary Fund data show. Brazil increased its Gold Reserves for the first time since December 2008 at a time when investors raised holdings in exchange-traded products to a record.Brazil’s Gold Holdings expanded 1.7 tons last month to 35.3 tons.Turkey’s Gold holdings increased 6.8 tons and Ukraine added 0.3 ton. If a central bank like Brazil decides to enter the Gold Markets, it will keep buying for a longer time horizon until an optimal share of Gold holdings to total asset is reached & a constant demand like these is highly Gold Price supportive.

Gold Tips

COMEX Gold futures fell further with prices falling to the low $1,707 an ounce, nearly one and half month low as the selling pressure stayed in place amid mixed undertone in global equities and strength in US dollar. The greenback is quoting in a positive manner after losing slightly yesterday and neared 1.3000 levels against the Euro yet again today. Euro slipped from the early high of $1.3075, quoting right now at $1.3004 mark level, down 0.47% from the previous close. COMEX Gold futures for December are quoting at $1710.10, down $16.2 per ounce on the day. Gold has been hit hard in the last few days as highs near $1800 per ounce proved unsustainable and weak Chinese demand hurt the sentiments. Mainland Chinese imports of gold from Hong Kong slowed dramatically in August. Hong Kong shipments of the metal to Mainland China for the month totaled 54 tons, a drop of 29% from the 76 tons shipped in July, according to data from the Hong Kong Census and Statistics Department.

MCX Gold fell further with December contract is trading at Rs 30,928, down Rs 140 per 10 grams. The counter is likely to find support at Rs 30,850-30750 and resistance at Rs 31050-31180 level.

COMEX Silver futures December contract is quoting at $31.735, down 0.517 per pound in the afternoon session.

Silver December is quoting at Rs 59029, down Rs 569 or 0.98% from the previous close. The counter is having resistance at Rs 59400-59600 and supports at Rs 58700-58600 level.

Commodity Tips

Commodity Wheat futures spurted by almost 1% today in the wake of strong import demand from Malaysia along with possibility of weak production status in major wheat producing states. Prices are likely to gather some more buying in the near term.

As per latest release from Food Ministry, Malaysian government has shown strong interest in Indian wheat. This trade can be initiated by long-term contract with India for supply of Indian wheat through diplomatic channel. For this, Malaysian government is also planning to send official intimation to Indian government. Ministry also stated that Over 1.5 million tonne wheat via private trade has already been exported from the country since September 2011.

Moreover, possibility of weak wheat production estimates in some of the major producing states such as Punjab and Haryana might also incite the strong stockiest interest in local mandies. The Agriculture department has set the 2013 wheat production target at 86 million tonnes against the record harvest of 93.9 million tonnes this year. Government is trying to promote the cultivators to shift area under wheat towards less irrigation- crops, like pulses, corn and other coarse grains.

Consequently, the NCDEX November Wheat contract increased by almost Rs 15 per quintal to trade at Rs 1560 per quintal in today's trading. Technically, prices are likely to test 1570-1575 at the higher side while supports are likely at Rs 1545-1550 per quintal in the near term.

Gold Free Updates

MCX Gold futures are trading in the negative terrain, tracking the sudden losses in the global prices and worries over demand in the near term. The metal has been trading lower in the last few days and tested a one month low on COMEX yesterday as the downward modification extended further amid sound US retail sales numbers and a surge in the US equities. COMEX Gold futures are quoting at $1738, nearly unaffected on the day.

The golden metal has witnessed a sizeable fall in last two sessions, coming off nearly 50 dollars per bounce amid a flurry of profit selling as the incapability of the metal to break above $1800 per ounce levels had a depressing effect on the sentiments. The commodity normally follows risky assets and yesterday's massive jump in stock markets should have helped it. However, the unrelenting worries over Indian demand scenario in the just about to get underway-festive season are making futures market trader take it easy.

For the moment, the US retail sales were boosted by the launch of iPhone 5 and registered 1 a rise of 1.1% in September. Equity markets were further boosted on media reports that Spain is ready to make a formal request for aid, allowing the European Central Bank to buy its sovereign debt, but is delaying an announcement due to concern about the effect on other euro-zone members.

Asian shares are trading higher on a steady note and some buying has emerged in Gold as well. While this has helped it gain some ground from its one-month low levels of $1728 per ounce, the fall in last two sessions has done a considerable damage. The local MCX Gold futures broke under Rs 31000 per 10-gram mark yesterday and extended this drop further today. The metal quotes at Rs 30869, down Rs 108 per 10 grams or 0.35% with 2% rise in the open interest. The counter had dropped more than Rs 300 yesterday.